Sunday 2 March 2014 06.22 EST
First published on Sunday 2 March 2014 06.22 EST

Department store chain John Lewis is backing a Silicon Roundabout-style technology incubator – to be called "JLab" – to develop the next big thing for its stores.

Technology has become a battleground for retailers as the lines between physical and online shopping continue to blur. Others including Tesco, Marks & Spencer and Argos have invested in similar digital "hubs" in an attempt to harness the brain power of would-be digital entrepreneurs as smartphones and other internet devices change the way people shop.

John Lewis's retail director, Andrew Murphy, said the group was looking for ways to better knit together the shopping experience in stores and online and for new ways to communicate with customers. "We know customers value being able to shop with John Lewis by phone, in shops and online and anything which enhances or simplifies that experience is of interest to us," he said.

The digital workshop, which launches in June, is a partnership with technology entrepreneur Stuart Marks, who has built up and sold several technology firms and runs an investment fund investing in start-ups. The incubation period will run until September with five start-up companies offered office space and advice from other well-known tech entrepreneurs.

"We have crafted something unique in the UK retail sector that will give businesses access to the best mentors and to an environment where they can develop their ideas," said Marks. "I'm certain that we will find a new and exciting technology." The search starts on Monday with applicants invited to apply via the website jlab.co.uk.

At the end of the incubation period, JLab will select a winner and back it with a £50,000 investment. If the project is a success the idea will be introduced across its 40 stores. "What I'm looking for from the successful JLab applicants is deliverable but stretching innovation which offers real benefit for customers in both our bricks and clicks businesses," said Murphy.

The new project comes ahead of the publication of John Lewis Partnership's annual results on Thursday, when the employee-owned group is expected to reveal a cut in the annual bonus handed out to staff. All permanent employees receive the same percentage payout, which is likely to be 14%-15% compared with 17% last year.